Know the Loan Market

To have a home to call your own is a common and probably most popular dream. Home prices and mortgage rates have been at their lowest, but heavy down payments stand in the path of many such dreams. There was a time when the housing market was booming and almost anyone could get a loan with little or no money down; but that is no longer the case. The zero down payment and 100% financing loan options remain, but only for the affluent.

The low down payment loans require a minimal down payment, unlike the usual trend. This helps in reducing the burden of saving large sums of money at the time of buying the house. Approximately 60% – 80% of the loan amount is attached to the home’s value and the remaining amount is added to the customer’s secured investments. Thus, the customer only has to make the monthly mortgage payments toward the loan.

If one were to look around, there are several other options available to those who may not qualify for the above mentioned loans targeted at über rich customers. We have compiled a list of such loans to help you make the right choice:

1. FHA mortgage
This offers a minimum down payment of 3.5 percent and is available to most people.
About 15% of all home loan borrowers get FHA Insured loans.

2. Navy Federal Credit Union
The Navy Federal Credit Union, the nation’s largest in assets and membership, offers 100% financing to qualified members who want to buy a primary home. The eligibility is restricted to members of the military, some civilian employees of the military and U.S. Department of Defense, and family members. The credit union brought back its zero-down financing in 2010.

3. VA loans
Veterans Affairs offers no-down payment mortgages for qualified veterans. There is no mortgage insurance here and the borrower pays a funding fee, which can be accounted with the loan amount. The funding fees varies depending whether the veteran served in the regular military, the Reserves, or the National Guard, and also whether it is their first VA loan.

4. USDA mortgage
The Department of Agriculture’s Rural Development mortgage guarantee program is a popular venture and surprisingly, their loans are not confined to farmlands. The USDA mortgage originates from a bank and there is no mortgage insurance. Instead, the USDA takes a 2% guarantee fee, which can be accounted with the loan amount.